Treasury Secretary sets goal for cryptocurrency regulation

“We are about to roll out some significant new requirements,” Mnuchin told the Senate Finance Committee, according to several media reports. “We want to make sure that technology moves forward; on the other hand, we want to make sure cryptocurrencies aren’t used for the equivalent of old Swiss secret number banking.”

Mnuchin supplied no details on what the new regulations might entail. The Trump administration has recently expressed concern that cryptocurrencies like Bitcoin are being used to execute illegal transactions and evade U.S. sanctions. The regulations being developed would increase transparency to deter money laundering and other illegal uses for cryptocurrency.

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) produced guidance in 2019, followed by an advisory, to assist financial institutions in identifying and reporting suspicious activity around cryptocurrency transactions.

“Simply stated, those who accept and transfer value, by any means, must comply with our regulations, and the criminal misuse of any methodology remains our fundamental concern,” FinCEN Director Kenneth Blanco said last year.

As for a U.S.-backed cryptocurrency, Mnuchin and Fed chair Jerome Powell gave conflicting accounts on the Trump administration’s interest in developing a U.S. digital currency.

Mnuchin told the Senate Finance Committee he did not believe one would be necessary for several years. But Powell, speaking Wednesday before the Senate Banking Committee, said every major central bank in the world is examining the benefits and drawbacks to developing their own digital currencies. The Fed is doing its due diligence as well, he said.

“We think it is our responsibility to be at the very forefront of knowledge and thinking about a central bank digital currency,” he said.